Cost-Driven Market: PTA Prices Fell First, Then Rose in August

August 30 news

According to the commodity market analysis system, in August, the PTA market in China experienced a decline followed by a rebound. The average PTA market price in the East China region was 4,891 CNY/ton, an increase of 1.45% from the beginning of the month. In the first ten days, due to OPEC+ increasing production and the continuous decline in crude oil prices, along with the expectation of inventory accumulation, market prices fell. In the middle and late part of the month, the petrochemical industry's efforts to counter domestic competition and unplanned losses in PTA production led to a significant rise in market prices. By the end of the month, concerns about weakening supply and demand caused the market prices to fall from their high levels.

On the PTA supply side, some plants are undergoing maintenance, resulting in an industry operating rate hovering around 68%. However, market supply remains stable, with no signs of tightness. In early September, three PTA units—capable of producing 2.25 million tons, 2.20 million tons, and 4.50 million tons respectively—will gradually resume operations, shifting the industry’s supply-demand dynamics from inventory depletion to a balanced state.

The crude oil market is caught in a tug-of-war between bullish and bearish factors, leaving it poised for a complex outlook in the near term. On the supply side, geopolitical risks between Russia and Ukraine have intensified due to Trump’s deadline for negotiations, heightening concerns about potential supply disruptions. Meanwhile, on the demand side, both U.S. crude oil inventories and Cushing crude stocks have declined, while the Strategic Petroleum Reserve has seen an increase—providing some support for oil prices. However, U.S. tariffs imposed on Indian purchases of Russian crude could pose a challenge. As of August 26, the settlement price for the October WTI crude oil futures contract stood at $63.25 per barrel, while the October Brent crude oil futures settled at $67.22 per barrel. Moving forward, key attention will remain focused on developments in the Russia-Ukraine situation, as well as the policy guidance expected from the OPEC meeting on September 7.

The operating rate in the downstream polyester industry has seen a slight recovery, prompting PTA buyers to capitalize on lower prices. Historically, as autumn and winter orders gradually come in and the peak "Golden September" season kicks off, demand typically starts to pick up. However, this year, ongoing tariff disputes have weighed heavily on the export performance of finished textiles and apparel, delaying the onset of the "Golden September" season. As a result, most textile companies remain cautiously optimistic, primarily focusing on maintaining rigid demand-driven procurement strategies.

Analysts believe that in September, the return of PTA maintenance facilities is uncertain. On the demand side, the market is looking forward to the traditional peak season in September to provide a boost. However, in the absence of clear direction, PTA prices are expected to follow crude oil price fluctuations in the short term.